Gulf Shores has received no payment from oil company responsible for spill

View full size (Press-Register/Bill Starling)BP Contractors clean up oil on the beach in Gulf Shores near the Gulf State Park Fishing Pier Friday, July 2, 2010. Oil was washed well inland on the beach by Hurricane Alex as it made it's way across the southern Gulf of Mexico.

GULF SHORES, Ala. -- To date Baldwin County's two beach cities and the county government have filed Gulf oil-spill related reimbursement claims with BP PLC for loss of revenue and expenses totaling nearly $1.8 million.

So far, the oil giant, owner of the spewing well that has soiled local shores and devastated coastal Alabama's tourism-based economy, has paid about $126,000 of those invoices, according to Gulf Shores, Orange Beach and Baldwin County finance officials.

Orange Beach and Baldwin County received their first checks June 25 to pay expense claims filed during the first days of May. Gulf Shores, meanwhile, has yet to get anything from BP.

Some days, a BP employee will call for City Hall's street address, and tell Gulf Shores Finance Director Cindy King that a check is in the mail. The next day, someone asks for a post office box number to mail a payment. And so it has gone, King said, since mid-June.

Paul Bascham, with BP's claims operation, said Thursday that Gulf Shores' first claim -- to cover pay for employees who performed spill-related tasks in late April -- has been approved but not yet delivered.

"There were some early delays as BP corporate and the claims team made certain that we had a procedure in place that we could repeat," Bascham said. "I certainly agree that two months will be too long for future claims."

The holdup, local leaders say, has not instilled confidence that BP will make good on its pledge to pay all legitimate claims -- at least not in any timely fashion. If local governments, with accounting staffs, fastidious records and political clout, can't get BP to pay claims, how, local leaders wonder, will small businesses manage?

"There's no rocket science -- here's the invoice, write the check -- unless they're going to call us liars and say we're being fraudulent," said Orange Beach Mayor Tony Kennon, whose administration has asked BP to pay about $930,000 in expenses and lost revenue.

From the oil spill's onset, Orange Beach has provided BP, at the company's request, with paramedics and ambulances at a cleanup staging area at Perdido Pass. Orange Beach has billed BP about $123,000 for those services, said Finance Director Clara Myers. So far, the city's been paid $26,000, Myers said.

"If you can't do something as simple as an hourly invoice that you requested," Kennon said, "how can we ever expect that you're going to be able to handle the sophisticated claims of millions and millions of dollars?"

Like the beach cities, Baldwin County's finance officials are accustomed to accounting for expenses during disasters. After hurricanes, the Federal Emergency Management Agency typically reimburses local governments for their manpower and materials used in cleanup. This summer, though, Baldwin County accountants are tracking hours spent by purchasing agents procuring boom instead of the hours crews clock clearing roads, said Baldwin County Budget Manager Ron Cink.

Of five biweekly pay periods for which Baldwin County has filed claims, BP has responded to one, delivering a check June 25 for $38,216,27, Cink said. That covered expenses claimed on May 9. To catch up to Baldwin County's outstanding claims, BP will need to send another $141,077.89, Cink said.

"We're hoping we broke the code on this," he said.

Beyond expenses, Gulf Shores and Orange Beach have begun to seek reimbursement for lost revenue. Bascham said BP anticipates paying such claims, but has yet to do so and hasn't really figured out how it will handle them.

Orange Beach has asked for about $670,000 in lost sales and lodging taxes, liquor levies and money forfeited when summer sail camp had to be canceled, Myers said.

Gulf Shores officials believe that the spill cost the city about $1 million in tourism-related revenue last month. So they've filed a $450,000 anticipatory claim intended to move cash into city coffers quickly while municipal accountants calculate the precise losses, King said.

"Because we're so tourism-dependent, we wanted to make sure we had some money in the pipeline to keep going," said King, who said it costs about $2 million to run the city for a month. "Just to make ends meet, we need that cash flow coming in."